By Sobia Hanif

Taiwan issue has been a long standing crucial point in the US-China relationship. China’s persistent claim that Taiwan is an integral part of the mainland has not only been challenged by the Taiwanese government repeatedly but also taunted by the rigorous flow of economic and military aid to Taiwan, under the Taiwan Relations Act. This intern has resulted in creating a rancorous relationship not only between Taiwan and China but also a relationship based on suspicion between the US and China. While China feels betrayed by Taiwan because it is harboring US interests in the Pacific and providing the US an opportunity to contain China’s ever-growing influence in the region, it also wants to integrate Taiwan into it’s mainland in accordance with the “one country two system’s proposal” to elevate it’s national prestige and to make allowances for China’s losses in the past.

Taiwan issue is more complex than it appears. The US political, strategic and business interests have compounded it furthermore. US interests in the region can be traced back to the mid 19th century when the US began to expand in Asia Pacific. M.C Perry, who led a US fleet to visit the island in 1854 even, proposed that Taiwan be procured as a front post for the US to ensure stability in western pacific. Perry also wrote that if the US could control Taiwan, it could also control China. After the cession of Taiwan to Japan in accordance with the Treaty of Shimohoseki, at the end of Sino-Japanese war of 1895, the US involvement in the region ended for nearly half a century. The Cairo Declaration of 1 December 1943 committed the US and other Allied powers to restore to China “all the territories Japan had stolen from the Chinese including Taiwan and Penghu”. This commitment was reaffirmed in the Potsdam Proclamation of 26 July 1945. The situation changed dramatically with the outbreak of The Korean War in 1950. The US perceived this as part of a larger plan to expand communism in Asia and considered the Soviet Union and China to be the masterminds behind it while China considered it a hostile act of the United States to block unification. The US thus retained Taiwan as a frontline ally in western Pacific and for the next three decades actively supported Taiwan against China’s claim that it is an integral part of the Chinese mainland.

However, the US congress passed The Taiwan Relations Act in1979 according to which the US could provide Taiwan with arms of a defensive nature. The PRC strongly condemned this act and considered it “an unwarranted intrusion by the United States in the internal affairs of China.” Keeping in view the Strategic importance of Taiwan the US provided it with military aid worth $5.6 billion between 1945 and the late 1970’s. Also from 1955-78, South Korea and Taiwan received over $9 billion in military assistance. During the same Period the US contributed only $3.2 billion to Africa and Latin America combined. US arms transfer to Taiwan has been significant despite the absence of a diplomatic relationship or a treaty alliance. The value of deliveries of the US defence articles and services to Taiwan totaled $3.7 billion in the 2001-2004 period and $3.9 billion in 2005-2008. Among customers worldwide, Taiwan ranked 3rd (behind Egypt and Saudi Arabia) in 2001-2004 and 4th (behind Israel, Egypt and Saudi Arabia) in 2005-2008

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Under the Taiwan Relations Act (TRA) was enacted on 10 april1979, the US has been providing military and economic aid to Taiwan in order to defend itself against any act of aggression by China. However, this act is unique in itself because of a number of reasons. Firstly, the TRA falls short of a defence treaty. The language that has been used in the act implies statements of policy rather than law. Therefore it lacks binding authority. On the contrary, China finalized Economic Cooperation Framework Agreement (ECFA) with Taiwan.

The ECFA is considered to be the most significant agreement between China and Taiwan since the end of the civil war in 1949. It cuts tariffs on 539 Taiwanese exports to China as compared to 267 Chinese products entering China. It is estimated that ECFA will boost bilateral trade to $110bn a year. Many in Taiwan consider this deal to be a major success for improving the economic condition of Taiwan which has been badly hit by the economic downturn in IT and the general trend of economic recession all over the world. With the major world powers recovering from the recession, Taiwan has also been looking for ways to resuscitate its economy. By entering into the ECFA with China, Taiwan not only intends to improve its economy but its relations with China also. Apart from the economic packages offered to Taiwan, China has also approved regular direct charter flights, direct sea transportation, postal links and food safety mechanisms.

Taiwan has reciprocated by lifting longstanding restrictions on business investment in China and lowered its bid for participation in the UN agencies. Due to the growing proximity in relations between Taiwan and China, many analysts believe that the Taiwan-PRC relations are eroding US influence in the Pacific. A spokesperson for President Ma stated that “These will not only have a wide-ranging influence on the future development of ties between China and Taiwan, it will also help further consolidate peace and prosperity.” The deal was signed by semi-official representatives of both sides and not government representatives in order to avoid giving any implicit indication that it was an agreement between two different states.

Although the ECFA is not a full scale Free Trade Area (FTA) but in practice, China has given more benefits to Taiwan than it gave to ASEAN in the CHINA-ASEAN FTA. While China agreed to make tariff cuts on 400 items for ASEAN, it made tariff cuts on 593 products for Taiwan.

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Never the less many dissenting notes have been heard expressing their concerns regarding the ECFA saying that the deal would make Taiwan’s economy too dependent on China and in turn it could be used to force Taiwan to comply with its demands and thus compromise its sovereignty.  The Chinese government has also stated clearly that it intends to promote an economic integration and eventually a politic integration of the two. Many analysts in the west consider this an attempt to jeopardize US interests in the region by offering Taiwan “a big, fat dollop of honey which would serve as a suicide tablet for Taiwan in the long run. Taiwan has recently shown little interest in re-engagement with the US, realizing that this would undermine its efforts to promote economic cooperation with China. Taiwan has been keeping a low profile with the US and showing interest in developing positive relations with China.  Under president Ma Ying jeou, China is trying to solidify the ECFA so that it can advance trade with China and other countries in Asia and elsewhere. It has conducted joint naval exercises with the Chinese navy, thus presenting a show of solidarity with the Chinese government.

Taiwan also aligned itself with China in its dispute over the Senkaku islands with Japan. Taiwan sent coastguard ships to protect Taiwanese fishermen working in the disputed region. These islands are under Japanese administration with claims by Hong Kong, Taipei and Beijing. The conflict began when a Chinese fishing trawler collided with a Japanese coastguard. The Chinese crew was arrested but later released but the skipper was kept in detention.

The Chinese responded immediately with harsh criticism from the highest governmental levels. Eventually the skipper was also released. Taiwan offered its complete support to China against Japan while realizing that the US had vowed to protect “the territories under the administration of Japan” according to US-Japan security treaties.

Taiwan does not want to upset its relations with the US, despite its continued proximity with the Chinese. Taiwan has long been well aware of its strategic importance for the US and continues to play smart by demanding further leverages from the US. Former US Deputy Secretary of State, Richard Armitage visited Taipei on 25th March 2011.  President Ma urged the US government to admit Taiwan into its visa waiver program and permit the sale of F-16 C/D Falcons as soon as possible. Furthermore Taiwan has long been asking the US for a Taiwan-US FTA.

What appears to be happening here is that the Taiwanese government is seeking to reap benefits from both the present and the emerging superpowers of the world. However, it is yet to be seen for how long the Taiwanese government can play the  balancing act and what will be its eventual outcome.

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China is employing a multi-dimensional approach towards the Taiwan issue. This approach largely comprises of economic incentives, diplomatic engagement and military cooperation with Taiwan and other Asia-Pacific states. The Chinese government claims that by such advances China will succeed in creating a congenial environment in Asia-Pacific region which will in turn facilitate Taiwan’s eventual unification with the mainland. For now it appears that China is playing its cards well and this is illustrated by the Taiwanese government’s inclination towards China. Not only has Taiwan supported such acts on part of the Chinese government but has shown interest in similar lucrative opportunities for bilateral cooperation.

Other than promoting its soft image in the world, China continues to advance and modernize its military. The grandiosity of its military might is without doubt intimidating for Taiwan. This is proven by the fact that China continues to maintain the deployment of around 1300 missiles directed towards Taiwan. The actual use of those missiles may never really come into practice but it is of immense symbolic significance. Another aspect of China’s strategy for Taiwan’s unification is the strengthening and enlargement of its diplomatic circle. The current Chinese leadership has succeeded in persuading a growing number of ASEAN states to declare some form of neutrality in the event of a military conflict between the US and China over the Taiwan issue. In this regard Australia, Singapore, Malaysia, Philippines and South Korea have assured Beijing that they would not support the US in such a conflict.

The US seriously needs to rethink its policy towards Taiwan. The change of government in Taiwan in 2008 marked a major shift in its policy towards China, emphasizing on cooperation rather than confrontation. This should be a good enough a reason for the US  to reassess its previous policies regarding the Taiwan issue. In January 2010, President Obama announced his decision to send $ 6.4 billion in arms to Taiwan. In response the Chinese expressed their disapproval of the action. According to the Chinese foreign minister, the step “constitutes a gross intervention into China’s internal affairs” The main question that needs to be addressed here is that should the US continue to send billions of dollars in military and economic aid into Taiwan while its own economy has received major setbacks at home. Many analysts state that by doing so the US could be headed down the path of a fiscal suicide following the examples of the Soviet Union and Great Britain. Such an approach could eventually become the greatest threat to its national security. The US also needs to decide whether maintaining support for Taiwan will be beneficial for the US or improving relations with China will be a better option in its times of financial crunch.  Furthermore, the US needs to rethink about how far it can go to ensure Taiwan’s independence and what it would cost the US in the long run.